Affinity Equity Partners, a pan-Asian private equity firm, will start raising Fund III, with a target of at least $1.5 billion (€1.2 bn) before the year is over. A source close to the fund said internally Affinity was targeting $2bn.
Affinity’s Fund II, which closed on $700 million, in October 2004, is expected to be fully invested toward the end of the year, according to another source close to the fund manager.
Affinity has also commenced the process of selecting a placement agent for the new fundraising exercise. Credit Suisse First Boston was engaged as its placement agent for Fund II.
“You can expect the new fund to be two to three times larger than its precedent, as is the trend these days,” said one of the sources
Three Asian-dedicated funds raised by The Carlyle Group this year, and two Australia-New Zealand funds by Pacific Equity Partners and CHAMP Private Equity have attracted substantially larger commitments than their precedents.
In April, Longreach Group raised $750 million for a Japan-focused fund, and in July, MBK Partners raised $1.56 billion for a North Asian fund. Last year, CCMP, the spin-off from JPMorgan Partners, raised $1.575 billion for its pan-Asia fund, and CVC Asia topped that by raising $1.975 billion.
Affinity’s next fund will the second it will be raising as an independent firm. Established in March 2004, Affinity spun out of the former UBS Capital Asia Pacific – the private equity arm of UBS in the region. Affinity operates out of 4 offices – Hong Kong, Singapore, Seoul and Sydney.